No using drinking water for washing vehicles, construction and swimming, says civic body

Pune Municipal Corporation (PMC) has decided to put a ban on the usage of drinking water for washing of vehicles, construction and swimming. Legal action, including charging fines and discontinuing water supply has been proposed for offenders.

The decision was taken at a meeting on Tuesday, attended by mayor Dattatraya Dhankawade, municipal commissioner Kunal Kumar, water supply department officials and all party leaders, during which Dhankawade issued the order to the civic administration to initiate such action against defaulters.

District guardian minister Girish Bapat, at a meeting last week, had postponed the decision about cutting down water supply.

At Tuesdays meeting, ongoing proceedings were reviewed, concluding that precautionary measures need to be taken for water conservation.

Dhankawade told media, An order has been given to the administration to create awareness for saving water. Action will be taken against people or organisations that use drinking water for construction and other miscellaneous purposes. A fine will be charged if they refuse to cooperate and their water connection will be cut off.

The city had witnessed water cuts in the summer of 2009 and 2010, when water was not sufficiently available. Water cuts rose from 20 to 50 per cent in 2009, as it was declared a drought year. In 2010, due to the lack of water availability in dams, water supply was reduced by 10 to 15 per cent. The following year, thanks to the shortage of rain, PMC imposed a 20 per cent reduction in supply.

That means Ryan and his classmates have to spend an extra hour in reading every day. Its called Extended Reading Time, a program designed to boost students’ test scores. The state requires the extra time but doesnt give any extra money.

It has happened to all of us. Youre standing in the produce aisle, just trying to buy some zucchini, when you face the inevitable choice: Organic or regular?

Its a loaded question that can mean many different things, sometimes all at once: Healthy or pesticide-drenched? Tasty or bland? Fancy or basic? Clean or dirty? Good or bad?

But heres the most important question for many customers: Is it worth the extra money?

The answer: Probably not.

Higher price doesnt really mean higher quality

Itll come as no surprise to most shoppers that organic produce is typically more expensive than the other options. In March, a Consumer Reports analysis found that, on average, the prices on organic foods were 47% higher than on their conventional counterparts. USDA numbers bear out this difference too. The wholesale price of a 25-pound sack of organic carrots in San Francisco in 2013, for example, was more than three times the price of a conventional bag.

Organic has essentially become another way of saying luxury.

(Its worth noting that not all items see such drastic markups all the time: Three-pound cartons of mesclun were only 23% more expensive, according to the USDA, and sometimes organic produce is actually the less expensive optionbut thats a rarity.)

While County Board members in the end approved keeping salaries and benefits for themselves and for the countywide officers up for election next year at their current levels, several members made mostly unsuccessful attempts to lower them.

The only successful change was that of board member Chuck Wheeler, R-McHenry, to eliminate the long-standing practice of paying the vice chairman an extra $5,000. A state#x2019;s attorney#x2019;s opinion concluded the County Board has no authority under state law to pay the extra salary. Even with that opinion, the vote to take away the extra money barely squeaked by on a 12-10 vote.

Wheeler and others were careful to note they had no problems with the performance of current Vice Chairwoman Yvonne Barnes, R-Cary, or her predecessors.

#x201c;The public is looking at us to watch the taxpayers#x2019; dollars,#x201d; Wheeler said. #x201c;It#x2019;s not the money, it#x2019;s the symbolism of what#x2019;s right and what#x2019;s wrong.#x201d;

As a compromise, board members approved an amendment by board member Ken Koehler, R-Crystal Lake, that would pay the vice chairman the chairman#x2019;s rate for the duration of any time he or she has to fill the position because of a chairman#x2019;s prolonged illness or absence. The chairman makes $82,200 a year.

Koehler, a former board chairman, had criticized the board#x2019;s decision to strip the $5,000 from the vice chairman.

#x201c;By dinking around with $5,000, we just crossed the line on an issue that should have remained the way it was,#x201d; Koehler said.

But board member Andrew Gasser, R-Fox River Grove, disagreed. Gasser, a retired Air Force officer, said elected officials should behave no differently from men and women serving their country #x2013; if emergencies dictate them stepping into larger roles, they do it without thought of more compensation.

#x201c;If we have to keep going on and around about how much money each individual is going to get paid, maybe we need to look at that individual and say, #x2018;Do we really want that person in there in the first place, because they don#x2019;t want to do it now because they#x2019;re not going to get another five grand?#x2019; #x201d; Gasser said to audience applause.

Board member Nick Provenzano, R-McHenry, made an unsuccessful motion to lower the next-term salaries of the auditor, coroner, circuit clerk and recorder of deeds from the proposed $104,750 to the $82,200 the chairman makes. Provenzano said such a move would help #x201c;bring these salaries into realistic compensation and in line with the private sector#x201d; and help eliminate longtime career politicians.

‘The Government is committed to a fair tax system so is restricting tax relief landlords can claim on property finance costs to the basic rate of income tax.

Landlords are currently able to offset their mortgage interest and other finance costs against their property income, reducing their tax liability. This relief is not available for ordinary homebuyers and not available to those investing in other assets such as shares. Currently the landlords with the largest incomes benefit the most, receiving relief at their marginal tax rates of 40% or 45%.

By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system. This recognises the benefits to the economy that investment in property can bring but ensures that the landlords with the largest incomes will no longer benefit from higher rates of tax relief.

By unifying the treatment of finance costs for all individual landlords, the Government is reducing the distortion between property investment and investment in other assets, and reducing the advantage landlords may have in the property market over ordinary homebuyers.

Less than 1 in 5 (18%) of individual landlords are expected to pay more tax as a result of this measure. Taking account of the other measures from the Summer Budget, the Office of Budget Responsibility (OBR) have not adjusted their forecast for house prices. The OBR expect the impact on the housing market will be small. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.

Property 118.com Landlord Response:

Landlords who are members of the online forum Property118.com have been actively campaigning against the introduction of the budget tax change and have today set out their initial comments on the Government response:

We are not surprised by this response from HM Treasury. It shows that their impact assessment is weak and does not address all the relevant issues.

We firmly believe that George Osborne’s budget proposal to restrict finance cost relief for individual landlords is ill-thought-out and will result in serious social and economic consequences for many groups not considered by the Government.

As we do not have space in this article to detail how all these groups will be affected, we would direct readers to the excellent www.saynotogeorge.co.uk website which details the extent of the proposal and its ramifications.

We do not accept the Government’s statement that only 1 in 5 (18%) landlords will be affected as they have produced no evidence to substantiate their figure, nor clarify if their figure includes those lower rate tax payers who will be moved into a higher tax band as a direct result of the proposal.

We have asked the Government to confirm their estimate of the number of private rental properties that will be affected as that is the key issue rather than the number of landlords. The Government has declined to answer this question on the grounds that it would be too costly to check their records. The Government has chosen to withhold information so that the true impact of their proposal is not in the public domain. We believe that the publication of this information (and other information we have requested under the Freedom of Information Act) is in the public interest and we call on the Government to be open and transparent with the information it holds.

It is not appropriate for the Government to compare the tax treatment of landlords with ordinary homebuyers. They are comparing apples with oranges. Landlords are buying income-generating assets and providing a service to tenants who either choose or need to live in private rented accommodation. Ordinary homebuyers are buying houses to live in, rather than buying houses to generate income.

The Government’s response compares investment in property to investing in other classes of assets such as shares; however investing in property has one major difference from most other forms of ‘investment’. Investing in property is a socially useful activity, satisfying demand for housing of all types and styles. Many landlords are providing housing to people on benefits and to those on low incomes and a healthy private rented sector aids labour mobility.

Landlords have to provide a service to their customers (tenants) in order to stay in business. Restricting the tax relief is contrary to how all other finance costs are treated for sole traders. There is no logical justification for this, especially given the social and economic benefits that landlords operating in the private rented sector provide.

The Government’s comparison of the tax treatment of landlords with the tax treatment of people who invest in shares is bizarre and is a new line of argument for the Government. People who invest in shares through an ISA pay no income tax on the income they receive and pay no capital gains tax on the gains they make. Landlords pay both income tax and capital gains tax so investors in ISAs receive much more favourable tax treatment than landlords.

Investing in shares via a pension is also one of the most tax efficient ways of investing with higher rate tax payers receiving tax relief at 40% and additional rate tax payers receiving tax relief of 45%.

The Government suggests that the budget proposal will reduce the advantage that landlords may have in the property market over ordinary homebuyers. They have however not articulated what these advantages may be. We believe we are responding to demand for rental accommodation, rather than competing with people who wish to buy. We have asked the Government to provide information which proves that landlords have an advantage and we await their response.

According to a report by the Select Committee for Communities and Local Government, in 1999 there were 2m privately rented homes, out of a total of 20m households. Now there are 3.8m privately rented homes, out of a total of 22m households. There are slightly more owner occupiers – up from 14m to 14.3m – but significantly fewer people renting social housing. In effect, private rentals account for most of the increase in the supply of housing over the past 15 years, but there is no evidence that landlords ‘took’ these from potential owner-occupiers.

Following the Summer Budget, the think tank, the Policy Exchange, noted that ‘In truth, the tax system massively favours home owners – for one thing home owners do not have to pay capital gains tax on their principal residence, whereas buy-to-let landlords do on the rental properties they sell. Rental income is also taxed (and even more now).’

Our position is clear: Mortgage interest is a cost of running landlords’ businesses and should be offsetable for all landlords.

We note that the Government has said that the proposal will have no impact on house prices and that the impact on the housing market will be small. If the Government does not know how many properties will be affected, we do not know how they can come to this conclusion. We have asked the Government for information on these issues and await their response.

It is our opinion that the Government’s policy on Housing is ill-conceived. They are obsessed with promoting home ownership for their own political reasons. The simple fact of the matter is that not everyone can afford to buy a house; not everyone wishes to own a house; there is not enough social housing to house those people on benefits or on low incomes. For all these people, the private rented sector meets their needs.

The private rented sector will decline as a result of this tax proposal as many landlords will be forced to sell or their properties will be repossessed. We believe that many tenants will be made homeless and that councils will not be able to cope with the demand for emergency temporary accommodation.

For a very significant number of landlords, the impact of this budget proposal will be catastrophic. It will destroy long established businesses as tax demanded will exceed actual profit made. For these landlords the effective tax rate on their actual profit will exceed 100%. This is illogical and sends out the wrong message to hard working people who aspire to be self sufficient and get on in life.

Landlords will not remain in business if they are facing huge tax bills and making losses. They will either sell up or go bust. Some landlords are even considering emigrating to avoid going bankrupt. That is how bad this proposal is.

The UK is facing a housing crisis and despite what Generation Rent and some parts of the media say buy-to-let landlords are not to blame. For over 30 years, successive Government’s have sold off council houses, thus depriving the country of affordable housing supply. Now the Government wish to extend the Right to Buy to Housing Association tenants. This is madness. If social housing and private rented housing both decline (and we think it will), who will house those who can’t afford to or do not wish to buy?

Demand for housing is growing and not enough houses are being built. The solution to the housing crisis is simple – BUILD MORE HOUSES. The Government proposal will do nothing to increase supply. In fact, it will slow down the rate of house building as landlords will stop buying new build properties. If private house building rates slow down, so too will the delivery of much needed affordable housing which is delivered via planning obligations.

The tax changes that are proposed are so complex that their true impact is only now being fully understood by some landlords. Our campaign is gaining momentum and is being covered in the national press. We appreciate the support we have received from the Daily Telegraph who have decided to run a campaign to ‘Axe the Buy to Let Tax Grab’. Writing in the Telegraph on 22 August 2015, Richard Dyson wrote: George Osborne doesn’t have a clear philosophy on tax and how a tax system should work to help an economy grow and help people prosper. Like Gordon Brown, who did so much to destroy a culture of investing – damaging both savers and enterprise – Mr Osborne tends to grab and snatch revenues as he can, with his guiding principle being to snatch from the areas where he’s least likely to encounter resistance. You can hate landlords and lament the rise of buy-to-let as a favoured investment of the middle classes. But even if you do, you must surely also condemn the action of a Chancellor who, out of nowhere, has announced the destruction of this asset class for all except the very rich.

Dyson goes on to say that: this tax change, which was called for by cynical politicians and commentators hoping to strike a populist tone, sets a new benchmark of absurdity in Britain’s already ludicrously complex tax regime. We now have a tax which is applied at a rate of more than 100pc on investors’ returns. We now have people paying tax on zero income. We now have a tax regime that appears not to be able to distinguish between revenue and profit. There are other less philosophical objections. Where will the councils find the extra money to put yet more people into short-term accommodation when their book of private-sector landlords shrinks? More importantly, what will happen to families and individuals forced out of their houses as landlords sell up?

Dyson says: this Alice in Wonderland Tax sets a new benchmark in financial absurdity and he believes that the tax change will be the death of buy to let. The fact that the proposal is being phased in is no consolation for portfolio landlords who are highly geared. These landlords are trapped. If they keep their properties, they will incur massive losses and will quickly go bust. If they try to sell to reduce their finance costs, or incorporate to avoid paying more income tax as property companies are not affected by the Budget proposal, they will incur capital gains tax and other charges that will mean this is not a viable option.

For all of the above reasons, the landlords at Property118.com say No to George and his Alice in Wonderland Tax.

This is just round one of our fight to have this absurd tax plan scrapped. Our campaign will continue until the Government sees sense.

The best news: Foreclosures hit their lowest point in the 16-year history of the New York Fed’s tracking of consumer credit, a nationally representative sample drawn from anonymized Equifax credit data. About 95,000 people had a new foreclosure notation added to their credit reports between April 1 and June 30, a new low over the 16 years.

Meanwhile, US consumers are financing new and used vehicles at a record pace.

Auto loan originations reached a 10-year high in the second quarter, at $119 billion, fueling a $38 billion increase in the aggregate auto loan balance, which has now passed $1 trillion.

The jump in auto loans also drove most of the $67 billion increase in non-housing debt balances. Credit card balances increased, by $19 billion, to $703 billion, while student loan balances remained flat. Mortgage balances and HELOC (home equity lines of credit) dropped by $55 billion and $11 billion, respectively.

There were $466 billion in new mortgage originations in the second quarter. Just under half of the second-quarter originations were driven by borrowers with credit scores over 780. By contrast, only 8 percent ($38 billion) of all new mortgages were originated by borrowers with credit scores below 660.

Overall new delinquency rates improved, continuing a trend that began in 2009. As of the end of the second quarter, 5.6 percent of outstanding debt was in some stage of delinquency.

Every quarter, many money managers have to disclose what theyve bought and sold, via 13F filings. Their latest moves can shine a bright light on smart stock picks.

Today lets look at investing giant Bill Ackman, who founded Pershing Square Capital Management in 2003. An investor with roots in real estate, Ackman is an activist, often advocating strongly for big changes at companies in which he has invested heavily. Soon after Ackman invested in the Fortune Brands conglomerate, for example, the company began looking to spin off various divisions — breaking up into the alcohol-focused Beam and Fortune Brands Home amp; Security. Beam has since been gobbled up by Japans Suntory.

Pershing Squares reportable stock portfolio totaled $14.4 billion in value as of June 30, 2015, spread over just a small handful of stocks. Its top three holdings make up a whopping 65% of the portfolios total value. Now thats concentration! (Several of his largest positions are based outside the US, too, giving the portfolio extra geographical diversification.)

Interesting developmentsSo what does Pershing Squares latest quarterly 13F filing tell us? Well, for starters, there wasnt much activity. Its a concentrated portfolio with few positions, and the main activity in the quarter was the selling off of all remaining shares of Botox maker Allergan (NYSE: AGN) . Ackman had been pushing Canada-based Valeant Pharmaceuticals (NYSE: VRX) , his largest holding, representing 30% of his portfolio, to buy Allergan, but instead Ireland-based Actavis bought it in a deal valued around $70 billion. Ackman didnt get the deal he wanted, but with Allergan bought at a premium and him having accumulated a 10% stake in it, it was estimated that he made about $2.6 billion on the deal.

Actavis, focused on eye, skin, and stomach drugs, has taken on the Allergan name and has become one of the worlds largest drug companies, with annual revenue topping $20 billion. Its retaining the Actavis name for its US and Canadian generic drug business. CEO Brent Saunders has a big goal that makes the company worth watching: to generate organic revenue growth at a compound annual growth rate of at least 10% for the foreseeable future.

HerbalifeWhile there wasnt much other activity in the portfolio, its worth noting that Ackman remains very negative on the supplement specialist Herbalife (NYSE: HLF) , which he has shorted. The company released an anti-Ackman website recently, while Ackman has been calling for the company to release a 2005 video in which the companys CEO reportedly substantiated Ackmans characterization of the company as a pyramid scheme. Meanwhile, Herbalife has had a lawsuit against it alleging pyramid-scheme-like behaviors dismissed.

There are ongoing investigations, but in the meantime, the company appears to be performing well. Herbalifes last quarterly report featured an estimate-topping performance thanks to growing sales in China and cost containment. Still, with some 80% of its revenue generated abroad, the company was hurt by unfavorable currency exchange rates.

We should never blindly copy any investors moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.

TransUnion’s data shows credit union auto loan origination volume grew at a rate more than double the pace of the entire industry. Findings from a survey of 90 credit union executives TransUnion released this week also highlighted these institutions’ appetite for auto paper certainly isn’t waning; its perhaps even becoming greater.

TransUnion’s survey revealed that auto loans rank at the top of the list for credit union executives in terms of loan growth, focus and opportunity during the next 12 months. Auto loans were ranked No. 1 by 48 percent of credit union executives and in the top 3 (of 12 credit categories) by 81 percent of respondents.

With its capacity to generate capital growth if you can sell for more than you buy, and the potential to earn income from rent, property is a popular choice among Australian investors.

But if youre getting close to retirement and considering buying or selling an investment property, there are a number of things to think about.

Buying investment property close to retirement
Think about time frame

Headlines shouting about Sydney price growth in excess of 10% for the past year may have encouraged somewhat short-term thinking around making money out of property.

But it’s important to recognise property is generally considered a long-term investment.

There are a number of reasons for this, including the fact the property market moves in cycles, which means if you buy close to the top of a cycle, you often need to hang on to the property until you get well into the next cycle in order to make a gain.

What is the property cycle and why does it matter?

There are also high entry and exit costs to consider, such as stamp duty, which mean you need to generate a lot of growth to put you ahead.

Even if you are comfortable taking a long-term view on property, when you are getting close to retirement the other important thing to consider is liquidity – meaning how fast your assets could be converted to cash if you needed to sell quickly.

Even in a good market, it can take many months to sell a property, particularly if you are unwilling to compromise on price.

So while investors will often find the bricks and mortar nature of a property reassuring, and seek the income that a rental property can offer, this does need to be weighed up against its suitability as you get closer to retirement.

Cash flow considerations

Once in retirement, income from investments typically becomes very important as you are no longer earning a regular wage.

In this context, it’s also important to think not just about what comes in from your investments, but also whether they’re likely to require any money to be paid out.

Wealth management partner at HLB Mann Judd, Jonathan Philpot, says the nature of residential property is that there’re often repairs and maintenance expenses involved, which can be a drain on cash flow.

It should also be mentioned that property may incur annual land tax depending upon which state it is located in and its unimproved value. Land tax will be payable regardless of your income level and whether such income is from private investments or a pension fund.

Debt-related costs can be a strain

The other important thing to consider is any costs involved in servicing debt if you need to borrow to buy an investment property.

“You don’t typically want to be going into retirement with debt still to repay because people often retire on cash flows well below what their income was when they were earning a salary

“So cash flow-wise things can become a real strain if you’re having to repay a loan and you are relying primarily on your investment wealth for income”, Philpot says.

Borrowing to invest: using the equity in your property

“For most people their strategy as they approach retirement is to reduce their levels of debt, because you don’t want to be caught in a situation where you’re forced to keep working simply to repay loans on investment properties.”

The other thing to consider in taking on debt to buy a property close to retirement is that the benefits that make this an attractive proposition earlier in life may no longer be as compelling.

“A big reason why people borrow to invest in properties is because of the negative gearing benefits but you don’t need any tax deductions when you haven’t got any income to offset it”, Philpot says.

60 second guide: Negative gearing

Can you still diversify?

Diversification, or spreading investment risk, is important no matter what your stage of life.

You need to consider what buying a property will do to the skew of your asset mix. Will it mean that 85% of your wealth is tied up in the Melbourne property market, for example?

Then, you need to consider what would happen to your retirement goals if that investment failed to perform – for instance if the market slowed, or you were unable to rent it out for a period of time.

Why you need to spread your investment risk

Selling investment property close to retirement

For those who have invested in property as a wealth accumulation strategy during their working life, there are a number of things to factor in close to retirement when considering whether and when to sell these properties.

Capital gains tax and super

Philpot says often people use investment property wealth to build up their superannuation funds. But tax considerations mean it can be worthwhile getting advice so you can evaluate different strategies.

“Rather than selling those properties while they are still working and then paying capital gains tax on top of their employment income, what some people do is once they finish up work, say at age 60, sell the property the following financial year.

“They may then only have the capital gain from the property in their taxable income for that financial year,” Philpot explains as one example.

What is capital gains tax?

“The capital gains tax can be further reduced if the proceeds of the property are contributed into superannuation – up to $35,000 can be claimed as a personal tax deduction to assist with reducing the capital gain on the property”.

“Because you’ve got up to age 65 to contribute into super without having to satisfy any work tests – often people use that period between finishing work and age 65 to contribute the sale proceeds of property investments etc. into their super.”

“Once money is in super, you only pay 15% tax on the investment earnings and 10% on capital gains, but when you get to pension age you can move all that money into a tax-free environment,” Downes says.

He explains that this can make a big difference in deciding when to realise capital gains on a property.

For example, if an investor who is about to retire sells a property and realises the capital gains then they can move that money into super. That money can then be used to invest in growth assets such as property or shares again if the investor so wishes without having to worry about capital gains tax.

“It’s a very effective strategy when you think that if someone is retiring at 60 or 65 the money is going to be in superannuation for 25 or 30 years, so you can imagine what kind of capital gains might have to be paid if the asset is still held in personal names for another 30 years.”

The suitability of strategies will depend on personal circumstances and goals, which is why is it always recommended to do your own research and seek advice where needed.

Where to next?

Should you take more risk with your retirement money?

How to invest like a super fund manager

How to be a contrarian investor

Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.